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August 2010

Two hearings will be held in the next week that could effect the size, effectiveness, and purview of the Texas Commission on Jail Standards, the state agency charged with overseeing Texas' massive county jail system, including a number or privately-operated jails and detention centers.

1) Joint Budget Hearing: Tomorrow, Wednesday, September 1st, from 9am-10:30am in the Capitol Extension, Room E2.028 will see a budget hearing in which the agency will most likely be fending off budget cuts. Check out Ana Yañez-Correa's excellent guest-post over at Grits for Breakfast for why this hearing is important. Here's the highlight:

In the face of a potential 15% budget cut (including across-the-board 5% agency budget cuts and an extra, requested 10% budget cut), TCJS could potentially lose 2-3 staff members, possibly inspectors (out of a current total of 5 inspectors). Without inspections, TCJS will not be able to fully realize its critical mission to set constitutional jail standards, conduct facility inspections, and enforce compliance with rules and procedures - all of which keep Texas jails safe, well regulated, and run by educated, professional leadership.

Study and make recommendations related to municipal jails and other detention facilities that operate without state agency oversight. Identify the number of such facilities and the population detained, as well as best practices for municipal jails. Make recommendations to improve services and consider options for oversight of facilities by the Texas Commission on Jail Standards.

The combined effect of these hearings could shape the debate over TCJS in the upcoming legislative session. On one hand, the agency could be stripped of inspectors and see its ability to oversee jails (both public and private) diminished. On the other hand, the Senate Criminal Justice Committee could lead a charge to expand the purview of the agency to include municipal jails and county-owned detention centers currently exempted from oversight. The latter could make a big difference in regulating problem-facilities like the GEO's Reeves County Detention Center, which is currently exempt from state-oversight.

A Human Rights Watch report released yesterday identifies numerous cases of sexual assault against immigrants detained in Immigration and Customs Enforcement's vast and largely private immigrant detention system. As we reported, last week a former supervisor at Correction Corporation of America's T. Don Hutto detention center was arrested and charged in a case of sexual assault of many detained women being transported from the facilities.

In May 2007, when Hutto still functioned as a family detention center, a young boy was sleeping in a crib inside his mother’s cell when a guard entered and had sexual contact with her. Video surveillance captured the guard, employed by private contractor Corrections Corporation of America (CCA), crawling out of the cell in the middle of the night in an apparent failed attempt to evade security cameras.[36] CCA fired the guard, but he never faced criminal prosecution by either state or federal authorities. According to an ICE spokesperson, the police investigation concluded that the sexual contact had been consensual.[37] In any Bureau of Prisons facility in the US, the same incident would have constituted a crime because federal law criminalizes sexual contact between guards and those in their custody.[38] However, at the time, that particular provision of the federal criminal code applied only to facilities under the authority of the Department of Justice. Immigration facilities had been under the authority of the DOJ until 2003, but then authority passed to the newly created Department of Homeland Security. Consequently, the statutory provision did not cover sexual misconduct in ICE facilities at the time of the incident at Hutto. Later in 2007, a legislative amendment was passed to make the provision cover all federal facilities.[39]

The report also details alleged abuse at the GEO Group's South Texas Detention Center,

The South Texas Detention Complex in Pearsall, Texas has also been dogged by reports of sexual abuse of detainees.[40] In 2008, media outlets reported detainees attesting to frequent sexual abuse. One such report stated that documents obtained through a Freedom of Information Act request described an investigation into an alleged assault of a detainee from Mexico by a private security guard which led to his firing but did not result in prosecution.[41] According to the report, the documents also said that another detainee had reported multiple sexual assaults.[42]

And at Management and Training Corporation's Willacy County Detention Center in Raymondville,

In the summer of 2009, the Women’s Refugee Commission received numerous reports of sexual assault at the Willacy Detention Center in Raymondville.[43] In at least one case, a lawsuit was filed by the victim, who was transferred to the Port Isabel center after the allegations were made. The allegations received by the Women’s Refugee Commission included not only assaults by guards on women, but also one alleged incident in which a guard locked a female detainee in a room with a male detainee to whom he “owed a favor,” so that he could rape her. These reports came from various sources, including former staff at the facility who wished to remain anonymous. These alleged incidents were reported to Dora Schriro in August of 2009 and she responded by immediately going to Willacy herself to investigate and conduct interviews.

Former Corrections Corp. of America CEO — and current chairman — John Ferguson has taken one for the team. Ferguson has signed a deal with the prison management firm to hand over almost 166,000 stock options so the company can divvy them out to other employees. The options would have expired in 2017 and 2018. It’s a magnanimous gesture, to be sure, and consistent with Ferguson’s request last year that he not be given equity awards.

But it’s also worth pointing out that Ferguson, who led CCA for more than nine years, last year pocketed $11 million from the exercising of options and still controls another $13 million in company stock. Plus, the surrendered options had strike prices above $26, where CCA (Ticker: CXW) hasn’t traded since September of 2008.

We pointed out last week that GEO Group's top executives also brought in nearly more than $7 million and $3 million respectively, and that all of this wealth is accumulated through taxpayer dollars.

A former Corrections Corporation of America supervisor at the T. Don Hutto detention center in Taylor has been indicted on several counts of sexually assaulting women in his custody while the women were being transported to the facility. According to the story in the Austin American Statesman (Isadora Vail, "Former supervisor charged in sexual assaults of detainees," August 20),

Williamson County officials have charged a resident supervisor at a Taylor immigrant detention facility in the sexual assaults of three female detainees who were being driven to Austin-Bergstrom International Airport. Donald Dunn, 30, was arrested and charged Thursday with three counts of official oppression and two counts of unlawful restraint.

He is accused of inappropriately touching several women as they were being taken from the T. Don Hutto Residential Center to the airport. He remained in the Williamson County Jail on Thursday with bail set at $35,000.

The allegations were first reported to Austin police May 11 after one of the victims told an airport employee that Dunn had inappropriately touched her on the outside of her clothing, according to the Williamson County sheriff's office.

Sheriff's deputies interviewed Dunn on May 20, and he confirmed that the allegations were true, officials said. According to a news release from the sheriff's office, Dunn "explained to detectives that he told the women he was going to 'frisk' them and then inappropriately touched their breasts, crotch and buttocks. Mr. Dunn advised that he didn't do this for safety concerns but as self gratification. Mr. Dunn indicated to detectives that he had done this to numerous other women while performing his duties as a transport officer."

CCA has come under criticism for allowing male guards to transport female detainees without supervision, in violation of detention standards. Williamson County is holding a press conference at 10am, so we're bound to see a flurry of news after that, and will keep updating the story.

The GEO Group completed its takeover of Houston-based Cornell Companies last week, and yesterday announced the results of Cornell shareholder vote on the takeover. There has been little analysis of this deal, and how it will effect exisiting Cornell facilities, including its 10 facilities in Texas or otherwise.

The exception is, as usual, Scot Hensen at Grits for Breakfast, who argues that the deal may add to GEO's problems being highly leveraged:

The same warning was included in Geo's most recent 10K, but after the purchase of Cornell it deserves to be amplified. The more debt the company has, the greater risk they must "dedicate a substantial portion of our cash flow from operations to payments on our indebtedness." (They'll also be dedicating a portion of their revenue, btw, to pay the board chairman's son-in-law a fat $144K salary plus stock options, which is the kind of executive hire that to me raises a red flag.)

...

I'd also pointed out back in 2007 that GEO making its debt payments required the company to rely on payments from subsidiaries that it could not guarantee:

The 10-K declares that Geo relies on "distributions" (i.e., "profits") from its subsidiaries to pay its increasingly large debt. Profits from subsidiaries made up more than 28% of Geo revenue last year, but the 10-K cautions that "Our subsidiaries are separate and distinct legal entities and are not obligated to make funds available for payment of our other indebtedness in the form of loans, distributions or otherwise."

In other words, we're not solvent without payments we can't ensure will keep coming, and our subsidiaries are "separate and distinct legal entities" who we don't control. That works out nicely for Geo if they go bankrupt, doesn't it?

That was written when subsidiaries made up 28% of Geo's revenue. Today, according to Geo's 10K, "For the fiscal year ended January 3, 2010, our subsidiaries accounted for 50.1% of our consolidated revenue, and, as of January 3, 2010, our subsidiaries accounted for 59.0% of our total segment assets." If the Cornell acquisitions are treated as subsidiaries, that risk will be even further magnified. The Geo Group is a heavily leveraged company.

Scot's article is worth a full read, and feel free to check out our past coverage of the GEO Group.

The title basically says it all, and I'm stealing it almost verbatim from Scot over at Grits for Breakfast, who is has been covering this issue with his usual terrific coverage. Here's his take,

At 5% below their current budget, TDCJ suggests closing no prisons but somehow believes they can safely cut 1,700 staff, including 1,200 at correctional facilities. If required to cut their budget by 10%, says the LAR, they'll eliminate 4,700 staff (mostly prison guards and parole officers) and still not close any prisons, while cutting mental health services by $88.8 million! If required to cut 15%, reports the Statesman's Mike Ward, TDCJ might close one private facility and would lay off 7,300 people. The only reduction in capacity suggested in the LAR are Intermediate Sanctions Facilities (prison alternatives that by all account have worked well) and the elimination of 471 beds at unspecified private units.

These frankly aren't serious proposals. Indeed, nearly every cut proposed by the agency - to probation, to parole, to treatment, to mental health - seems targeted not to best serve the public interest but to maximize the future inflow of prisoners to ensure that all 112 Texas prison units remain full, no matter what. This is classic bureaucratic self-interest at work from an agency that perceives itself first and foremost as a prison operator and thinks of community supervision as frills. Likely TDCJ officials are hoping against hope that Sen. Whitmire will prevail in his effort to have criminal justice agencies exempted from budget cuts.

As Nicole reported back in February, it was Whitmire who floated cutting private prison contracts as a way to save TDCJ money in a time of budget cuts:

In recent weeks, Whitmire has publicly suggested that the state consider closing the privately run, 2,100-bed Mineral Wells Unit and perhaps aging prisons that are much more expensive to operate and maintain than newer ones.

Of course, with CCA already facing 12,500 empty prison beds around the country, the company surely doesn't want to see one of its largest Texas facility shuttered. It remains to be seen what the fight during the legislative session will look like, but we'll undoubtedly see an effort on the part of the private prison corporations to ensure that their facilities aren't closed. We'll keep you posted.

The private prison industry makes good sense for at least one group of well-heeled individuals - executives at the biggest private prison corporations who make big bucks operating these companies. We reported last month GEO Group CEO George Zoley and chief operating officer Wayne Calabrese were amongst the highest paid south Florida executives.

Now, Calabrese is selling two South Florida homes for a combined value of more than $3 million. The first, a modest 1,810-square-foot house in the Boca Raton Riviera subdivision, is going for a mere $575,000. The second is a 6,105-square-foot house Royal Palm Yacht & Country Club subdivision that is on the market for a less modest $2.475 million. Clearly, the prison business has been good to Mr. Calabrese.

Sometimes we forget that the wealth accumulated by private prison corporations and their executives comes soley from taxpayer dollars paid to companies that in turn don't spend all that money on correctional services. Calabrese's $3.6 million compensation was more than than 19 times the salary of TDCJ director Brad Livingston and more that 16 times the starting salary of the Secretary of Corrections for the state of California. GEO head George Zoley's total compensation last year was more than $7 million, and Zoley listed a home in Fort Lauderdale for sale for nearly $11 million last January. Private prisons are clearly good business for some.

The Corrections Corporation of America (CCA) held its quarterly conference call last week. We have previously reported that CCA has excess capacity and that trend continues; company officials mentioned they had unoccupied 12,500 beds in their system. As a result there are no immediate plans to build new CCA prison beds.

CCA currently operates 65 prisons, including 44 company-owned facilities that include 89,000 beds in 19 states and the District of Columbia. Currently, the company’s biggest customers are the state of California and the federal Bureau of Prisons (BOP).

During the call, CCA officials made assumptions that states and the federal government would soon need new beds to accommodate a growing prison population despite current budget constraints. The BOP is reportedly over capacity by 36%; while CCA claimed state prison systems exceed capacity by 12,000 prisoners.

Company representatives went on to mention that while current state prison demand is anemic, potential state customers are not authorizing new beds making the company’s excess capacity readily available for new contracts.

It’s a good thing that while CCA profiteers are struggling to find new customers for their excess supply that state legislators are rethinking criminal justice policies. In fact, the Bureau of Justice Statistics reported that state prison systems declined by nearly 3,000 beds in 2009; prison populations declined in 20 states. While tight budgets are a salient feature they are not the sole contributing factor. Our own Judy Greene co-authored a report earlier this year along with my Sentencing Project colleague Marc Mauer, entitled Downscaling Prisons: Lessons from Four States. In that report, Judy and Marc document legislative and administrative reforms that predate the current recession and contributed to the states of New York, New Jersey, Michigan, and Kansas all reducing their prison populations while maintaining public safety.

While there is movement at the state level, federal demand remains steady driven significantly by the need for capacity in the immigrant detention system. During the CCA call, company officials mentioned that Immigration and Customs Enforcement (ICE) population numbers 33,000 persons in detention. To meet demand, BOP issued several requests for proposals to add new beds to their system. These requests seek to contract with existing facilities and not new ones. One proposal request would add a new prison in either Texas, Arizona, or Oklahoma and would require a capacity of 1,200 beds.

CCA’s excess supply of prison beds shows that policy reforms - legislative or administrative -- can reduce the need for prison capacity. It further indicates that state policy makers can make other choices when confronted with how to maintain public safety. But, the steady demand from the federal government indicates that there continues to be an over-reliance on confinement as social policy -- the reason why the United States has the highest incarceration rate in the world. But steps can be taken at the federal level - in immigrant detention and the prison system to reduce overall capacity and undermine CCA’s efforts to fill those 12,500 beds.

Attorney Ron Rodriguez – just back from ceremonies in Vancouver, B.C. at which he was named 2010 Trial Lawyer of the Year by the Public Justice Foundation (PJF) – said he is all at once proud and humbled by the recognition for the law-making case he built and won against private prison operator Wackenhut Corrections (now the GEO Group) on behalf of the family of murdered inmate Gregorio de la Rosa. In 2006 a Willacy County jury verdict awarded $47.5 million in punitive and compensatory damages for malicious and wrongful death against Wackenhut and one of its wardens.

De la Rosa was brutally murdered in a Wackenhut (now known as GEO Group) prison in 2000 while the company's wardens allegedly laughed and smirked. The company was also accused of tampering with evidence, including destroying key video of the murder. An appeals court found that "Wackenhut’s conduct in maliciously causing Gregorio’s death and thereafter spoliating critical evidence so offends this Court’s sense of justice that a high ratio is warranted." Rodriguez also represents the families of Scot Noble Payne and Randall McCullough, two Idaho prisoners who committed suicide in separate GEO prisons in Texas.

this one, but Darren Barbee at the Fort Worth Star-Telegram has an excellent story ("Private company wants to keep operating Fort Worth prison for parole violators," July 22) about the GEO Group's bid for a contract renewal at it's North Texas Intermediate Sanction Facility:

A private prison for parole violators is bidding for a new contract to continue operating at 4700 Blue Mound Road. The facility is run by The GEO Group, which has had a spotty record with some of its other Texas prison facilities the past several years. Before the contract is awarded, a public hearing will be held.

"Their contract is set to expire ... and GEO is in the process of bidding on those beds again," said Jason Clark, spokesman for the Texas Department of Criminal Justice. "The hearing is a chance for the public [to] provide feedback." The hearing is scheduled for Aug. 24 at La Quinta Inn & Suites at 4700 North Freeway. (emphasis TPB)

Fort Worth's North Texas Intermediate Sanction Facility has 432 beds. The average stays are 60 to 100 days, with the longest confinement up to six months, Warden Darryl Anderson said. "Most people don't know we're here," Anderson said. GEO will get $6.9 million for operating the facility for the 12 months that end in February. It has operated the prison for 19 years and has about 100 employees, Anderson said.

The article points out GEO's spotty record across in Texas and weak oversight mechanisms at TDCJ:

In early 2007, a trusty paroled for aggravated robbery with a deadly weapon escaped from the facility. Anderson, who has been warden since 2006, said the man escaped with the aid of his sister and an in-law but was found shortly thereafter.

Overall, GEO's Texas facilities have had a few major problems, and the company's Coke County Juvenile Justice Center in Bronte was closed in 2007. GEO, formerly known as Wackenhut, began running the center in 2003 but let it fall into disrepair with unsafe and unsanitary conditions throughout. A few inmates at other GEO Texas facilities have committed suicide or instigated incidents categorized as riots, according to a company report.

In 2006, the company lost a wrongful-death case in Texas costing it $51.7 million, according to a filing with the Securities and Exchange Commission. This year, the company reported a $20.6 million decline because of the termination of management contracts at the Fort Worth Community Corrections Facility on North Henderson Street, as well as in Venus, Newton, Beaumont and an Illinois facility.

The Criminal Justice Department has come under fire for weaknesses in how it oversees private facilities that deliver residential services and substance abuse treatment programs, including those operated by GEO. In March, a state auditor's office report found that the department did not consistently include financial reporting requirements and performance standards in its contracts to hold providers accountable. The department also allowed three providers to conduct their own criminal-history checks of employees.